AMERICANDIVIDENDFUND EST·MMXXVI American Dividend Fund Est. July 4, 2026 · A nonpartisan policy laboratory

Proposal № 088 of 250  ·  Released September 29, 2026

The Parent's Year

The United States is the only member of the OECD with no national paid leave for a new parent. The average member pays a mother for 18 weeks; the average entitlement to parental leave is 39. Thirteen American states have built their own programmes and 37 have not. One paid year per child, split between two parents with a share reserved for each, at two-thirds of pay, citizens only, funded like Social Security. Say the cost out loud: about 0.8 percent of payroll.

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The problem

Every rich country pays a parent to stay home with a newborn, except one. Across the OECD, paid maternity leave averages 18.5 weeks, paid leave reserved for fathers averages about 2 weeks, and the average total entitlement to paid parental and home-care leave is 39 weeks. The United States offers, at the national level, twelve weeks of unpaid leave under a 1993 law that covers only about half of workers, because it exempts small employers and new hires. A parent who cannot afford twelve weeks without pay, which is most parents, goes back to work in the second or third week, or does not go back at all.

The states have filled some of the gap. As of 2025, twelve states and the District of Columbia run paid family leave programmes, funded by payroll contributions, paying a share of wages for between six and twelve weeks; Minnesota's began in 2026. They work, they are popular, and they stop at the state line. A mother in New Jersey is paid to recover from childbirth; her sister in Pennsylvania is not. About half the country's births are in states with no programme at all.

The evidence on what paid leave does is not seriously contested. Infant health improves, breastfeeding lasts longer, mothers are more likely to return to the same employer and to be employed a year later, and, where a share of the leave is reserved for fathers so that it is not simply a mother's benefit, fathers take it and the division of care shifts for years afterward. What is contested is the cost, and this catalog's rule is to state it.

№ 004 gave every citizen health coverage from birth. № 008 gave every citizen child a stake at birth. This proposal gives the parents the year.

The proposal

The Parent's Year: 52 weeks of paid leave per child, born or adopted, shared between two parents, with 16 weeks reserved for each parent and the remaining 20 divisible as they choose. Paid at two-thirds of the parent's wage up to the national median wage, from a national fund financed by a payroll contribution of about 0.8 percent, split between employer and employee. Available to every citizen parent, employed or self-employed. The employer's obligation is to hold the job.

How it would work

  1. A year per child. 52 weeks, usable within the child's first two years, so that parents may stagger their leave. A single parent takes the full year. Two parents share it, with 16 weeks that only the mother may take, 16 that only the other parent may take, and 20 that either may. Leave reserved for a parent and not taken is lost, which is the feature, not the flaw: it is what gets fathers to take it.
  1. Two-thirds of pay, to the median. The benefit is two-thirds of the parent's average weekly wage, capped at two-thirds of the national median wage, about $800 a week. A parent earning the median receives two-thirds of it; a parent earning twice the median receives the cap. The floor is set so that a minimum-wage parent's benefit is not below what the state programmes pay.
  1. Funded like Social Security. A payroll contribution on all wages up to the Social Security cap, about 0.4 percent from the employer and 0.4 percent from the worker, into a Parent's Year trust fund with its own actuary and its own annual report. The contribution is paid on every worker, citizen or guest, so that there is no advantage in hiring one over the other.
  1. Citizens only, with the guest's line drawn. The benefit is paid to citizen parents, on the registry of № 001. A guest worker under № 003 is covered for twelve weeks through the private coverage that proposal already requires as a condition of the visa, and the employer contribution paid on the guest's wages funds the trust fund like any other. The line is the same one № 004 draws, for the same reason: universality for members, honest provision for guests, and no incentive to prefer one.
  1. The job is held. Every employer, of any size, must hold the parent's job or an equivalent for the duration of the leave. The employer pays nothing during the leave, because the fund pays, which is what makes the mandate bearable for a business of four people whose bookkeeper has a baby.
  1. The self-employed and the gig worker. A self-employed citizen pays both halves of the contribution and receives the benefit on the same terms, as under Social Security. № 013's portfolio worker, with three employers, has contributions from each and one benefit.
  1. The states. A state programme that meets or exceeds the national standard may continue to administer it and receives the national funding; a state that does not is covered by the national programme. No parent loses a benefit a state already provides.

The numbers

The births. About 3.6 million a year, roughly 3 million to citizen parents. If 80 percent of eligible families take the leave and the average family uses 40 of the 52 weeks, at an average benefit near $700 a week, the cost is about $70 billion a year, plus adoption leave and administration: call it $80 billion.

The contribution. Covered payroll is about $10 trillion. $80 billion is 0.8 percent, or 0.4 from each side. A worker earning $60,000 pays about $240 a year; their employer pays the same. That is the price, stated.

What the states charge. The state programmes run on contributions of 0.5 to 1.2 percent of wages for benefits of six to twelve weeks; the national programme's 0.8 percent for a year reflects the cap at the median wage and the broad base.

What the leave returns. Studies of paid leave find higher maternal employment a year after birth, lower infant hospitalisation, and, where leave is reserved for fathers, a persistent shift in the division of care. The proposal does not claim these pay for the programme. It claims they are what the programme is for.

The honest objections

"Eighty billion dollars a year is an enormous new entitlement." It is, and the number is written in the summary so that no one can say it was hidden. It is also about a third of what the country spends on the mortgage interest deduction, and it is funded by its own contribution rather than by borrowing, as № 023 requires. A country that pays for a year of leave at 0.8 percent of payroll is paying what every other rich country decided, decades ago, was worth it.

"Employers will avoid hiring young women." The strongest objection to any maternity benefit and the reason the design reserves 16 weeks for the other parent: where fathers take leave, the expected cost to an employer of hiring a woman and of hiring a man converge, and the evidence from Quebec and Scandinavia is that reserved leave is what makes fathers take it. The fund, not the employer, pays the benefit, so the employer's cost is the held job, which is the same for either parent.

"Small businesses cannot hold a job open for a year." They hold it open for twelve weeks today under the 1993 law only if they have fifty employees; most are exempt, and their workers get nothing. Under the Parent's Year the small employer pays nothing during the leave and hires a temporary replacement with the wage it is not paying. The state programmes, which impose the same obligation, have not produced the small-business collapse that was predicted for each of them.

"Citizens-only leave, funded by contributions from guests too, is unjust to the guests." The guest's employer pays the contribution so that there is no advantage in hiring the guest, and the guest receives twelve weeks under the coverage № 003 requires. The catalog's line between member and guest is drawn the same way in every proposal that moves money, and the honest statement is that it is a line, and lines have two sides.

"A year is too long, and it will pull women out of the workforce." The OECD average entitlement is 39 weeks and the countries at a year or more have higher female employment than the United States, not lower. The reserved share for fathers is the design feature that prevents the leave from becoming a mother's absence, and the two-year window lets parents take it in the pattern that keeps them attached to work.

Sources

  • OECD Family Database, PF2.1 Parental leave systems (2025), on paid maternity, paternity and parental leave entitlements across member countries; OECD, Paid Leave for Fathers (2025)
  • Bipartisan Policy Center, Paid Family Leave Across OECD Countries and Why America Needs a National Paid Parental Leave Policy
  • National Partnership for Women & Families and state programme reports on the twelve state paid family leave programmes and their contribution rates
  • Rossin-Slater, Ruhm and Waldfogel, "The Effects of California's Paid Family Leave Program on Mothers' Leave-Taking and Subsequent Labor Market Outcomes," Journal of Policy Analysis and Management (2013); Patnaik, "Reserving Time for Daddy: The Consequences of Fathers' Quotas," Journal of Labor Economics (2019), on Quebec
  • Social Security Administration, covered payroll and taxable maximum
  • Proposals № 001 (The American Dividend); № 003 (The Open Door Compact); № 004 (CitizenCare); № 008 (Baby Shares); № 013 (The Portfolio Act); № 021 (The Caregiver's Wage); № 023 (The Debt Covenant)